Proof that Evosport is thousands in debt and soliciting customers for generation of capital

Proof that Evosport is thousands in debt and soliciting customers for generation of capital

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Proof that Evosport is thousands in debt and soliciting customers for generation of capital

Most of you saw that Benzboost broke the story last week on Evosport's debt and failure to deliver parts to customers. We quoted this debt as in the hundreds of thousands but now have exact up to date figures that were released by Evosport themselves. Where and why would they reveal these figures? They revealed the details in documents seeking investment from a select, hand picked group of customers in order to get money they need flowing in.

Evosport has about $300,000 of debt with a quarter million of back orders that have not been fulfilled. They are cash strapped so they have hand picked a number of their customers to solicit for investment purposes. We have been able to get a hold of the proposal with all the details from more than one source. This investment group is being spearheaded by Jim Brady (James J. Brady of Ringler Associates) who is one of their customers. He is also a CLK63 Black Series owner and it is Black Series owners who are mostly being targeted for investment. Why Jim Brady is doing this for Evosport, we have no clue but will certainly try to find out.

The investment documents are all detailed below. They verify that what was written previously is accurate. We now know the investment amount each customer is being asked to produce is $100k minimum. The documents are dated April 2011 so this information is as up to date as possible. Additionally, we do not know if Jim Brady has already invested as numerous sources have given us varying figures on his own commitment. It could be that he has already committed funds and that they have not been enough to pull Evosport out so other sources are being tapped.

We feel this information is necessary to not only validate our investigative journalism, much of which was already confirmed by customers coming forward to say they had not received their parts as well as JRCART confirming his issues with Evosport, but also to warn potential investors and customers of the current situation. It is irresponsible to continue to collect money from customers who expect delivery of their parts when there are very real issues that affect if Evosport will even continue to be viable. Not to mention that Brad Otoupalik e-mailed BenzBoost with veiled threats about "slander" which this isn't, it is completely factual based on details Evosport has verified in its own documents sent out into the public. Attempting to silence this on MBworld and threaten us only caused more people to be willing to come forward in support of what BenzBoost had the courage to reveal. We will not be pushed around or intimidated by Evosport or anyone else for that matter for providing the community with the truth MBworld hides from them.

You can verify all the information in the documents below. You can also see the questionnaire that attempts to assess just how much money the potential investor has. Evosport's fiscal information is all detailed as well as debt and pending litigation involving a damage claim to a Lamborghini. We have also been told of liens which if it becomes necessary we will look into in much further detail. Evosport is apparently in damage control mode attempting to pay off what they can which we have not been able to verify but have received some anonymous tips stating so. Additionally, one tip stated that Bob Otoupolik's credit cards have been locked but we do not know if this is true. If anyone has any information to verify this tip, do not hesitate to contact us.

screw these sponsors that play with member's money...i hope no investor touches that place and they implode with of course resolution to those members that have outstanding tabs

They certainly should not be protected and just keep trying to sweep this under the rug, it's ridiculous. It just shows their arrogance, they think they can play with peoples money and stall for months on end? It's absurd.

From a legal point of view, in case Evosport can NOT pay the money to fulfill all the back-orders, where do all those customers that have not received their products stand? Would they have to sue in small claims court to try and collect from Evosport? If not, can they still reverse the credit card transaction 6 months after charge so that they can get some of their money back?

From a legal point of view, in case Evosport can NOT pay the money to fulfill all the back-orders, where do all those customers that have not received their products stand? Would they have to sue in small claims court to try and collect from Evosport? If not, can they still reverse the credit card transaction 6 months after charge so that they can get some of their money back?

It could be that a large portion of them will simply be out of luck. I'm not sure how far back a credit card company will go.

It would not be a small claims things unless it was done on an individual basis. It would be more likely that some firm would create a class with all the individuals who did not receive parts.

From a legal point of view, in case Evosport can NOT pay the money to fulfill all the back-orders, where do all those customers that have not received their products stand? Would they have to sue in small claims court to try and collect from Evosport? If not, can they still reverse the credit card transaction 6 months after charge so that they can get some of their money back?

There would be a number of option, small claims only covers a few grand but is the quickest and least expensive avenue for a plaintiff to take. Depending on the number of plaintiffs and amount of damages a class action could be possible, but these take time. Even if people took them to court for refund (plus interest and court costs) and won there is still no way to guarantee people would get paid, if they dont have the money they dont have the money. The judge could garnish wages or even secure assets but that is highly unlikely. Then there is always bankrupcy, even if plaintifs were victorious a bankrupcy would put it back into the court system for a couple more years. Placing leins on their assets would be the best attempt because at least in Illinois its first come first served, first person/business with a lein gets awarded first. Obviously I am not an attorney but I have discussed everything above with an attorney in recent weeks and that about sums it up. Bottom line the little guy that is owed a $1k to $3k item its small claims or nothing, for the little guy with a bigger dollar amount its even a worse picture because the attorney and suit could cost thousands. For people like me that already utilize a corporate attorney on a very regular basis it wont really cost me a dime(car is in my companies name).

That being said everything is getting worked out with evosport, they only owe me a Vorsteiner front splitter which I was told they have at their shop and less than a $1000 refund and to work out the paint issue. Hopefully by this time next Wednesday when I am back in California I will have everything that is owed and I can put this all behind me.

That being said everything is getting worked out with evosport, they only owe me a Vorsteiner front splitter which I was told they have at their shop and less than a $1000 refund and to work out the paint issue. Hopefully by this time next Wednesday when I am back in California I will have everything that is owed and I can put this all behind me.

I hope it all works out for you and everyone else as well. Obviously a lot of people are paying attention to your issues so it is in their best interest to work out an amicable resolution ASAP and it seems they are trying.

There would be a number of option, small claims only covers a few grand but is the quickest and least expensive avenue for a plaintiff to take. Depending on the number of plaintiffs and amount of damages a class action could be possible, but these take time. Even if people took them to court for refund (plus interest and court costs) and won there is still no way to guarantee people would get paid, if they dont have the money they dont have the money. The judge could garnish wages or even secure assets but that is highly unlikely. Then there is always bankrupcy, even if plaintifs were victorious a bankrupcy would put it back into the court system for a couple more years. Placing leins on their assets would be the best attempt because at least in Illinois its first come first served, first person/business with a lein gets awarded first. Obviously I am not an attorney but I have discussed everything above with an attorney in recent weeks and that about sums it up. Bottom line the little guy that is owed a $1k to $3k item its small claims or nothing, for the little guy with a bigger dollar amount its even a worse picture because the attorney and suit could cost thousands. For people like me that already utilize a corporate attorney on a very regular basis it wont really cost me a dime(car is in my companies name).

That being said everything is getting worked out with evosport, they only owe me a Vorsteiner front splitter which I was told they have at their shop and less than a $1000 refund and to work out the paint issue. Hopefully by this time next Wednesday when I am back in California I will have everything that is owed and I can put this all behind me.

Originally Posted by Sticky

It could be that a large portion of them will simply be out of luck. I'm not sure how far back a credit card company will go.

It would not be a small claims things unless it was done on an individual basis. It would be more likely that some firm would create a class with all the individuals who did not receive parts.

Originally Posted by Exeenom

From a legal point of view, in case Evosport can NOT pay the money to fulfill all the back-orders, where do all those customers that have not received their products stand? Would they have to sue in small claims court to try and collect from Evosport? If not, can they still reverse the credit card transaction 6 months after charge so that they can get some of their money back?

Well...

Since I'm probably the one person truly qualified to speak on the matter, I will say this...

1. It's clearly obvious to everyone that Evosport has no operating capital. That being said, the company likely cannot afford legal representation to litigate any claims. They aren't even refunding money to customers who have not received product.

2. Theoretically, there are 3 options for customers (state laws vary--they would have to consult counsel in their state):

a) Small claims court - Each jurisdiction has maximum dollar amounts here. It could be as high as $10,000 or as low as $5,000. I'd imagine there are customers who have contract prices greater than any small claims court maximum amount. The positive outcome here is that a judgment will secure the customer as a creditor with a judgment lien and give them preference over unsecured creditors in Chapter 7 or Chapter 11 bankruptcy.

b) County or District court - Basically the same as small claims court, but with increased dollar amounts for damages.

c) Class action - I include this as a theoretical legal avenue, assuming there are more than 27 customers. District courts have held classes smaller than that do not meet the numerosity requirement for class certification set forth in F.R.Civ.P. 23(a)(1). Additionally, there would be issues with Rule 23 typicality, seeing that each customer has a different amount of damages, different contact, and possibly have factual differences in the breach of contract. (I've had cases where damages could potentially been different between class members, but each member suffered identical breach and other violations of law.)

That all being said and explained quickly (too tired for a more in depth explanation), when purchasing ANYTHING, use AmEx for the greatest protection.

most credit cards will only go back 30-90 days max ... I'm not sure of many that will go beyond that (amex is a charge card so its different than a typical CC).

litigation unfortunately won't do anything. Most of those people will simply have been stolen from with little to no recourse. Only way for them to get money back is if assets are all liquidated in bankrupcy and as many customers are made whole based on those assets. If they own the 15000 sq ft facility (which I doubt) then maybe that could cover everything.

but most likely even small claims won't do much if anything. They are flat broke and their balance sheet is bleeding by the day as this scandal gets exposed more and more. It appears they may be passing the point of no return from which no company can return. Once a company's reputation is completely destroyed, the brand has very little value left other than its physical assets on hand.

You can escape many things in this world, but karma is rarely one of them.

but most likely even small claims won't do much if anything. They are flat broke and their balance sheet is bleeding by the day as this scandal gets exposed more and more. It appears they may be passing the point of no return from which no company can return. Once a company's reputation is completely destroyed, the brand has very little value left other than its physical assets on hand.

If these guys invest, they will have more than enough operating capital to do what they need to do. It would seem a lot hinges on that.

most credit cards will only go back 30-90 days max ... I'm not sure of many that will go beyond that (amex is a charge card so its different than a typical CC).

litigation unfortunately won't do anything. Most of those people will simply have been stolen from with little to no recourse. Only way for them to get money back is if assets are all liquidated in bankrupcy and as many customers are made whole based on those assets. If they own the 15000 sq ft facility (which I doubt) then maybe that could cover everything.

but most likely even small claims won't do much if anything. They are flat broke and their balance sheet is bleeding by the day as this scandal gets exposed more and more. It appears they may be passing the point of no return from which no company can return. Once a company's reputation is completely destroyed, the brand has very little value left other than its physical assets on hand.

You can escape many things in this world, but karma is rarely one of them.

The building they supposedly own, is not in the company name. Without knowing how Evosport is organized, I wouldn't be able to even tell you if individual shareholders owning the building have personal recourse. That is probably a moot point anyway, because if Evosport reorganizes under Chapter 11, they will be entitled to keep their property. You can't operate a business without a building.

most credit cards will only go back 30-90 days max ... I'm not sure of many that will go beyond that (amex is a charge card so its different than a typical CC).

litigation unfortunately won't do anything. Most of those people will simply have been stolen from with little to no recourse. Only way for them to get money back is if assets are all liquidated in bankrupcy and as many customers are made whole based on those assets. If they own the 15000 sq ft facility (which I doubt) then maybe that could cover everything.

but most likely even small claims won't do much if anything. They are flat broke and their balance sheet is bleeding by the day as this scandal gets exposed more and more. It appears they may be passing the point of no return from which no company can return. Once a company's reputation is completely destroyed, the brand has very little value left other than its physical assets on hand.

You can escape many things in this world, but karma is rarely one of them.

I was able to perform a charge back after five and a half months using my Bank Of America credit card for a product that I did not receive. I had to fill out a small form and notarize it, but that only took 5 minutes and was no hassle. With American Express, my brother actually charged back an item 2 years after the fact (and they gave him absolutely no problem at all).

If Evosport (or any company for that matter) hopes to continue to use credit card transactions, they must follow the rules of the big debt authorization companies, such as, Authorize.net and others, or they can kiss their credit card charging system goodbye - not to mention they could still end up being chased by those credit card companies for payment later on.

Thank God for credit cards.... it's the only way to go when making big purchases

There would be a number of option, small claims only covers a few grand but is the quickest and least expensive avenue for a plaintiff to take. Depending on the number of plaintiffs and amount of damages a class action could be possible, but these take time. Even if people took them to court for refund (plus interest and court costs) and won there is still no way to guarantee people would get paid, if they dont have the money they dont have the money. The judge could garnish wages or even secure assets but that is highly unlikely. Then there is always bankrupcy, even if plaintifs were victorious a bankrupcy would put it back into the court system for a couple more years. Placing leins on their assets would be the best attempt because at least in Illinois its first come first served, first person/business with a lein gets awarded first. Obviously I am not an attorney but I have discussed everything above with an attorney in recent weeks and that about sums it up. Bottom line the little guy that is owed a $1k to $3k item its small claims or nothing, for the little guy with a bigger dollar amount its even a worse picture because the attorney and suit could cost thousands. For people like me that already utilize a corporate attorney on a very regular basis it wont really cost me a dime(car is in my companies name).

That being said everything is getting worked out with evosport, they only owe me a Vorsteiner front splitter which I was told they have at their shop and less than a $1000 refund and to work out the paint issue. Hopefully by this time next Wednesday when I am back in California I will have everything that is owed and I can put this all behind me.

I think many of the people waiting on parts are waiting on rotors and pullies ($1000 to $2500 price range), which hopefully (if it ever came down to that) would make collecting their money back an easy process in small claims court. In California, they have actually sped up the small claims court process, which helps a little, but hopefully things won't get to that level. Honestly, I can't see Evosport going down. The owners should be able to infuse some money into the company to keep the ship a float.

I think many of the people waiting on parts are waiting on rotors and pullies ($1000 to $2500 price range), which hopefully (if it ever came down to that) would make collecting their money back an easy process in small claims court. In California, they have actually sped up the small claims court process, which helps a little, but hopefully things won't get to that level. Honestly, I can't see Evosport going down. The owners should be able to infuse some money into the company to keep the ship a float.

How do you propose a court enforces a judgment...especially to an insolvent defendant?